Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2011

Goodwill and Other Intangible Assets [Abstract]

8. Goodwill and Other Intangible Assets

The Company allocates the purchase price paid in a purchase business combination to the assets acquired, including intangible assets and liabilities assumed at their estimated fair values. The excess of purchase price over these fair values is recorded as goodwill. Valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Critical estimates in valuing certain intangible assets include but are not limited to the projected growth factors; future expected cash flows, discount rates, potential competitive developments and changes in the market. Additionally, estimates associated with the accounting for acquisitions may change as new information becomes available regarding the assets acquired and the liabilities assumed.

The Company amortizes its definite — lived intangible assets using an accelerated or straight-line method that best approximates the proportion of the future cash flows estimated to be generated in each period over the estimated useful life of the applicable asset and evaluated on an annual basis to ensure continued appropriateness.

In accordance with ASC 350, Intangibles-Goodwill and Other (“ASC 350”), goodwill and our other indefinite-lived intangible assets are not amortized, but instead tested for impairment at least annually. The Company will perform its annual impairment tests as of July 31 of each year.

In accordance with ASC 360, Property, Plant and Equipment (“ASC 360”), the Company reviews its long-lived assets, including property and equipment and intangible assets subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset.

Goodwill

The following table represents the balance and changes in goodwill for the nine months ended September 30, 2011 (in thousands):


Balance as of January 1, 2011			—
InSysCo acquisition (see Note 3)			7,718

Balance as of September 30, 2011			7,718

The value of goodwill is derived from the Company’s acquisition of InSysCo. There have been no events or changes in circumstances that have occurred since the acquisition date of August 15, 2011, that would indicate that there has been an impairment of goodwill.

Other Intangible Assets — Customer Relationships

The following tables set forth information for intangible assets subject to amortization (in thousands):


Balance as of January 1, 2011	—
Customer Relationships from InSysCo acquisition (see Note 3)	4,490
Amortization of Customer Relationships	(120	)

Balance as of September 30, 2011	4,370

The following table summarizes the estimated future amortization expense related to the customer relationships for the remaining three months of 2011 and years thereafter (in thousands):


Years Ending December 31,
2011 (remaining)			294
2012			915
2013			692
2014			584
2015			504
Thereafter			1,381

Total			4,370

The Company is amortizing the intangible asset over approximately 12 years using a method that reflects the pattern in which the economic benefits of the intangible asset is consumed. There have been no impairment charges on long-lived assets for the periods ended September 30, 2011 or September 30, 2010.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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